US removes Vietnam from currency manipulation watchlist

The U.S. Treasury Department has removed Vietnam from its currency manipulation watchlist, as mentioned in a report sent to the Congress dated November 10.

Vietnam has been removed from the Monitoring List as it met only one of the three criteria over the four quarters through June 2022. The criteria are current account surplus, trade surplus with the U.S., and one-way intervention in the foreign exchange rate.

The country had previously exceeded the thresholds for all three criteria as noted in the December 2021, April 2021, and December 2020 reports, in each of which the treasury department conducted enhanced analysis of Vietnam.

In early 2021, the Treasury commenced enhanced bilateral engagement with Vietnam. As a result of discussions through the process, the U.S. Treasury Department and the State Bank of Vietnam (SBV) reached agreement in July 2021 to address concerns about the latter’s currency practices.

The Treasury continues to engage closely with the SBV to monitor the country’s progress in addressing concerns and remains satisfied with the progress made by Vietnam, it says.

Italy, India, Mexico, and Thailand have also been removed from the watchlist as they met only one of the three criteria for two consecutive reports.

The report also notes that Vietnam’s foreign currency reserves reached $101.4 billion by end-June, up $1.6 billion, and equivalent to 27% of the country’s GDP.